Wednesday, July 6, 2016

Brexit is Not the Problem

As the western economies continue to stagnate, Brexit is now being cited as the culprit.  Brexit is a new event, stagnation is an old story.  Brexit doesn't merit a footnote in this ongoing saga.

This focus on Brexit is similar to the media focus on the Fed and the ECB.  Nothing that the Fed and the ECB might or have done is relevant to global economic growth.  They just don't matter.

You wonder that perhaps by focusing on Brexit, the Fed, and the ECB, the media is simply taking the path of least resistance.  Instead of taking a hard look at why western economies are so moribund, the media treat the world economy like a puppet on a string, where the puppet-masters are things like Brexit, the Fed and the ECB.  That is so ridiculous as to be laughable.

The western economies suffer from too much government bureaucracy, too many rules, too many quixotic crusades (climate change, for example).  European economic growth is something one can study in historical data, but it is not something relevant to the future.  There will be no future economic growth in Europe and the reasons are all too obvious. Ditto for the US.

So, how do stocks look?  Not good.  What's the economic future for the average American, the average European?  Not good.

Studying Brexit, the Fed and the ECB are a waste of time.  They don't matter.

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